ACCA survey says outlook on global economy remains dim

Reports nominal decrease in business confidence, higher redundancies.


Our Correspondent February 05, 2013
About 43% of the professionals who took part in the survey reported decreased levels of business confidence, while only 19% reported improved confidence levels. DESIGN: ESSA MALIK

KARACHI: Global business confidence decreased marginally in the fourth quarter of 2012, according to a recent survey of 1,994 finance professionals conducted by the Association of Chartered Certified Accountants (ACCA) – a global body of accounting professionals.

About 43% of the professionals who took part in the survey reported decreased levels of business confidence, while only 19% reported improved confidence levels. In comparison, 41% of the respondents had reported decreased levels of business confidence during the third quarter of 2012.

Meanwhile, 30% of the respondents believed that the global economy was on course for a recovery – up from 29% in the third quarter of 2012 – while 65% believed it was either stagnating or deteriorating.



The ACCA claims that the Global Economic Conditions Survey, carried out in partnership with the Institute of Management Accountants, is the largest regular economic survey of accountants in the world in terms of the number of respondents and the scope of economic variables it monitors.

The survey does not state the number of participating finance professionals country-wise. Instead, it categorises participants region-wise.

South Asian economies

As regards business confidence among South Asia-based respondents in the period reviewed, 38.4% reported a decline while only 16.4% said it had improved. Similarly, 36.5% of South Asia-based respondents said that the global economy was on course for a recovery, while 61.6% believed it was either stagnating or deteriorating.

Quoting an unnamed manager, who works in Lahore at one of the “big four” global auditing firms, the survey said that many Pakistani organisations, especially in the textile sector, have gone out of business or face difficulties due to the power crisis and increased cost of inputs. “Hence, there is little room for business risk advisory services to be sold where risks have already materialised.”

Reporting developments in their organisations’ finance functions, 30% of the respondents from South Asian economies said there were compulsory redundancies in the last quarter of 2012. In contrast, only 18% had reported compulsory redundancies in the first quarter of 2012.

Similarly, 19% of the respondents in South Asian organisations reported that permanent finance staff was taken on board in the last quarter of 2012, as opposed to 11% in the first quarter. Only 11% of South Asian finance professionals reported that their organisations outsourced some services during the fourth quarter of 2012, as opposed to 22% in the first quarter.

The survey noted that the global economy made some progress in the last three months of 2012. “Overall, respondents in Western Europe, Asia-Pacific and Africa pointed to recovering labour markets, although their colleagues in the Americas, the Middle East and particularly South Asia, were less upbeat,” a report accompanying the survey stated.

Political reverberations

The ACCA Global Economic Conditions Survey states that its findings from diverse economies, such as the Americas, South Asia and Eastern Europe, serve as a reminder that politics can have a very real effect on the economy “even in the absence of actual shifts in policy.”

“As the recovery falters, the year 2013 seems likely to be dominated by such political disputes, as arguments about issues ranging from fiscal and monetary policy to trade barriers, incentives for investors and industrial relations, continue to rage,” it said.

The survey said that while there has been little real change in business confidence, the portents for 2013 are poor, with fundamentals still deteriorating in much of the world.

“The good news is that more and more respondents are becoming convinced that Europe now has the tools to deal with its sovereign debt crisis and that the threat of a hard landing in China has been averted – for now,” it said.

Published in The Express Tribune, February 6th, 2013.

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